Why Netflix and Amazon Are Dominating Live Sports

Introduction

In the competitive streaming landscape, providers seek innovative strategies to prevent subscription cancellations. One effective approach is investing heavily in live events and sports. Netflix and Amazon have embraced this tactic in their ongoing battle against traditional TV players like Disney and Comcast.

Live Events Prevent Churn

David Levy, co-CEO of Horizon Sports and Experiences, highlights the challenge of retaining subscribers in streaming services: "It's [easier] to cancel streaming than it is a cable service. You push a button on the platform and you're out."

Live sports, such as Thursday Night Football on Amazon Prime and WWE programming on Netflix, provide a compelling reason for customers to maintain their subscriptions. The consistent schedule and guaranteed entertainment value of live events create a sense of membership and reduce the likelihood of cancellations.

Sports Content Outperforms Scripted Shows

Levy emphasizes the unique advantage of sports content over scripted programs: "With scripted programs, you don't know whether it's a success or not. You know sports is going to be successful. They have built in fan bases."

Sports events have a predefined audience and generate a predictable level of viewership. This predictability makes them more reliable for attracting and retaining subscribers compared to scripted shows, which can be hit-or-miss in terms of popularity.

Projected Growth in Sports Streaming

According to PWC, by 2025, over 90 million US viewers are projected to stream a sports event at least once a month, a significant increase from 2021's 57 million. This growing demand provides a major opportunity for streaming platforms to expand their reach and subscriber base.

Netflix and Amazon's Dominance

Analyst Jeff Wlodarczak of Pivotal Research believes that Netflix has emerged as the victor in the global streaming race. Its continued dominance is attributed to its focus on acquiring valuable live sports rights, such as F1 and UFC, as well as its ability to consistently attract new subscribers.

Big Screens Still Relevant

Despite the rise of streaming, Levy notes that big screens remain important for many viewers: "A lot of people, including me, like to watch on Big TV screens." Traditional networks like NBC are also leveraging simulcasting opportunities through streaming services like Peacock, providing cross-platform access to their content.